In re Linerboard Antitrust Litigation

• Decision Date: 21 April 2004
• Docket Number: Civ.A. No. 99-1341.,MDL No.1261.,Civ.A. No. 98-5055.
• Citation: 321 F.Supp.2d 619
• Parties: In re LINERBOARD ANTITRUST LITIGATION This document Relates to All Actions.
• Court: U.S. District Court — Eastern District of Pennsylvania

321 F.Supp.2d 619

In re LINERBOARD ANTITRUST LITIGATION This document Relates to All Actions.

MDL No.1261.

Civ.A. No. 98-5055.

Civ.A. No. 99-1341.

United States District Court, E.D. Pennsylvania.

April 21, 2004.

COPYRIGHT MATERIAL OMITTED

Howard I. Langer, Golomb Honik & Langer, Philadelphia, PA, for Box plaintiffs and Liaison counsel for all plaintiffs.

Eugene A. Spector, Jeffrey J. Corrigan, Spector Roseman & Kodroff, Philadelphia, PA, Michael J. Freed, Steven A. Kanner, William London, Much Shelist Freed Denenberg Ament & Rubenstein, P.C., Chicago, IL, for General Refractories Co. and Co-Lead counsel for Corrugated Sheet plaintiffs.

Robert J. LaRocca, Kohn, Swift & Graf, P.C., Philadelphia, PA, H. Laddie Montague, Martin I. Twersky, Berger & Montague, P.C., Philadelphia, PA, Roberta D. Liebenberg, Donald L. Perelman, Fine Kaplan & Black, Philadelphia, PA, W. Joseph Bruckner, Lockridge Grindal Nauen PLLP, Minneapolis, MN, for Box plaintiffs, Oak Valley Farms, Inc., Garrett Paper Inc., Local Baking Products, Inc.

Mark Reinhardt, Mark Wendorf, Reinhardt & Anderson, St. Paul, MN, for Alber I Halper Corrugated Box Co.

James J. Rodgers, Dilworth Paxson, LLP, Philadelphia, PA, Richard J. Leveridge Elaine Metlin, Sarbina Nelson, Dickstein Shapiro Morin & Oshinsky, LLP, Washington, DC, for Tag-a-long plaintiffs.

Sherry Swirsky, Schnaeder, Harrison, Segal & Lewis, LLP, Philadelphia, PA, for defendants.

Douglas J. Kurdenbach, Kirkland & Ellis, Chicago, IL, for Tenneco, Inc., Tenneco Packaging and Packaging Corp. of America.

Steven J. Harper, Steven C. Seeger, Kirkland & Ellis, Chicago, IL, Daniel B. Huyett, Matthew W. Rappleye, Stevens & Lee, Reading, PA, for International Paper Co., Union Camp Corp.

James H. Schink, Kirkland & Ellis, Chicago, IL, for Weyerhaeuser Corp.

R. Mark McCareins, Dane A. Drobny, Michael J. Mayer, Andrew D. Shapiro, Winston & Strawn, Chicago, IL, for Jefferson-Smurfit Corp., Stone Container Corp., Smurfit-Stone Container Corp.

Edward M. Posner, Paul H. Saint-Antoine, Drinker, Biddle & Reath, Thomas F. Slater, Jr., Hunton & Williams, Richmond, VA, for Georgia-Pacific Corp.

MEMORANDUM

DuBOIS, District Judge.

I. INTRODUCTION

Presently before the Court is Class Plaintiffs' Motion for Final Approval of the Settlements with Defendants Packaging Corporation of America, Tenneco, Inc., and Tenneco Packaging, Inc. and with Defendants Stone Container Corporation, Jefferson Smurfit Corporation, and Smurfit Stone Container Corporation (docket no. 328, filed March 22, 2004) ("Motion for Final Approval"). A hearing on the Motion for Final Approval was held on March 26, 2004 ("Fairness Hearing"). For the reasons that follow, the Court grants the Motion and approves the settlement agreements between the classes as certified by the Court and defendants Packaging Corporation of America, Tenneco, Inc., and Tenneco Packaging, Inc. ("the PCA Settlement") and between the classes as certified by the Court and defendants Stone Container Corporation, Jefferson Smurfit Corporation, and Smurfit Stone Container Corporation ("the Stone Settlement").

II. BACKGROUND

A. FACTUAL AND PROCEDURAL BACKGROUND

The Court sets forth only an abbreviated factual and procedural history as pertinent to the Motion for Final Approval. The factual background of the case is described at length in this Court's Memorandum dated October 4, 2000 denying defendants' Motion to Dismiss, its Memorandum dated September 4, 2001 certifying classes of direct purchasers of corrugated boxes and corrugated sheets, and the Opinion of the Court of Appeals for the Third Circuit affirming the September 4, 2001 Memorandum and Order. See In re Linerboard Antitrust Litig., MDL No. 1261, 2000 WL 1475559, at *1-3 (E.D.Pa. Oct.4, 2000) ("Linerboard I"); In re Linerboard Antitrust Litig., 203 F.R.D. 197, 201-04 (E.D.Pa.2001) ("Linerboard II"); In re Linerboard Antitrust Litig., 305 F.3d 145, 147-49 (3d Cir.2002) ("Linerboard III").

This is an antitrust action involving allegations that a number of U.S. manufacturers of linerboard¹ engaged in a continuing combination and conspiracy in unreasonable restraint of trade and commerce in violation of Section 1 of the Sherman Act, 15 U.S.C. § 1. The seven lawsuits transferred to this Court for all pretrial proceedings by the Judicial Panel on Multidistrict Litigation on February 12, 1999 were instituted after an administrative complaint filed by the Federal Trade Commission ("FTC") against Stone Container Corporation was resolved by a consent decree. Linerboard I, 2000 WL 1475559, at *1 (setting forth allegations in FTC complaint and details of consent decree). Class Plaintiffs named twelve defendants in their Complaints-Stone Container Corporation, Jefferson Smurfit Corporation, Smurfit-Stone Container Corp., International Paper Company, Georgia-Pacific Corporation, Temple-Inland, Inc., Gaylord Container Corporation, Tenneco, Inc., Tenneco Packaging, Inc., Union Camp Corporation, Packing Corporation of America and Weyerhaeuser Paper Company-and alleged that they conspired to raise the price of corrugated containers and corrugated sheets throughout the United States by restricting production and/or curtailing inventories in violation of federal antitrust laws.

By Memorandum and Order dated September 4, 2001, this Court certified the following two plaintiff classes:

Class 1 — Sheet Class

All individuals and entities which purchased corrugated sheets in the United States directly from any of the defendants during the class period from October 1, 1993 through November 30, 1995, excluding the defendants, their co-conspirators, and their respective parents, subsidiaries and affiliates, as well as any government entities, and excluding those individuals and entities which purchased corrugated sheets pursuant to contracts in which the purchase price was not tied to the price of linerboard.

Class 2 — Box Class

All individuals and entities which purchased corrugated containers in the United States directly from any of the defendants during the class period from October 1, 1993 through November 30, 1995, excluding the defendants, their coconspirators, and their respective parents, subsidiaries and affiliates, as well as any government entities, and excluding those individuals and entities which purchased corrugated containers pursuant to contracts in which the purchase price was not tied to the price of linerboard or containerboard.

Linerboard II, 203 F.R.D. at 224. On September 25, 2001, defendants filed a Petition for Leave to Appeal pursuant to Federal Rule of Civil Procedure 23(f)² in the Court of Appeals. By Order dated December 18, 2001, the Court of Appeals granted that petition. Thereafter, on September 5, 2002, the Court of Appeals affirmed the ruling of this Court. By Order dated October 16, 2002, the Court of Appeals denied defendants' petition for en banc review. On January 14, 2003, defendants filed a Petition for Writ of Certiorari to the United States Supreme Court. The petition was denied on April 21, 2003. See Gaylord Container Corp. v. Garrett Paper, Inc., 538 U.S. 977, 123 S.Ct. 1786, 155 L.Ed.2d 666 (2003) (No. 02-1070).

In an Order dated August 26, 2003, this Court approved a partial settlement in the amount of $8 million between Plaintiff Classes and Temple-Inland, Inc. and Gaylord Container Corp. The $8 million settlement was reduced to $7.2 million in accordance with the terms of the settlement agreement based on the number of parties that subsequently opted-out of the classes. This first partial settlement was described by Plaintiff Classes as an "ice-breaker" settlement-a settlement that would lead to further settlements. Within a month of Court approval of the ice-breaker settlement, on September 22, 2003, the Plaintiff Classes and defendants International Paper Company and Union Camp Corporation, Georgia Pacific Corporation, and Weyerhauser Company announced they had reached a settlement agreement in the amount of $68 million. The Court granted final approval of that settlement on December 8, 2003. Prior to that date, in October and November 2003, the parties announced the two additional partial settlements that are the subject of the pending motion-the PCA Settlement in the amount of $43 million and the Stone Settlement in the amount of $92.5 million. As a result of a "most favored nation's clause" in the PCA Settlement Agreement, the terms of the Stone Settlement triggered a reduction in the amount owed by PCA from $43 million to $34 million.³ With the Court's approval of these last two partial settlements, all claims in the class action will be resolved for a total of $202.5 million. In absolute terms, according to a recent survey of all class actions between 1972 and 2003, the total settlements in the Linerboard litigation make it the sixth largest reported antitrust settlement. 24 Class Action Rep. 157, 169-170 (2003).

B. THE SETTLEMENT AGREEMENTS BETWEEN CLASS PLAINTIFFS AND DEFENDANTS PACKAGING CORPORATION OF AMERICA, INC., TENNECO, INC., AND TENNECO PACKAGING, INC. AND WITH DEFENDANTS STONE CONTAINER CORPORATION, JEFFERSON SMURFIT CORPORATION AND SMURFIT STONE CONTAINER CORPORATION.

Settlement negotiations between the Plaintiff Classes and Defendants Packaging Corporation of America, Tenneco, Inc., and Tenneco Packaging, Inc. ("PCA Defendants") and settlement negotiations between the Plaintiff Classes and Defendants Stone Container Corporation, Jefferson Smurfit Corporation and Smurfit Stone Container Corporation ("the Stone Defendants") (collectively "Settling Defendants") began shortly after the settlements with Weyerhauser, International Paper, Union Camp and Georgia Pacific were announced. While the negotiations were conducted separately, Class Counsel "adopted a strategy directed towards settling the entire case and viewed both negotiations as part of a single route to a common goal." Declarations in Support of Class Settlements with the Stone and PCA...